Upgrading their Manufacturing

At the start of the century, China was developing at an
extraordinary rate. Its development model was based on low-manufacturing that
was combined with higher savings and investment rates. This model came to be a
success that helped raise the living standards, but not led to the government
to adopt policies that will help upgrade the country’s industry. It is noted
that China is currently in a “middle-income trap” and is working towards
escaping. This trap is a result from the failure of the country to have a
faster labor productivity growth within their technological innovation and
industrial upgrading compared to high-income countries. Industrial policy is vital
for the government to prioritize the different uses of the limited resources
given to aid technological innovation and industrial upgrading. In regards to
the industrial business model Premier Li Keqiang said, “China is already a big
manufacturing nation, but far from manufacturing power… integration of
manufacturing and the interned is an inevitable path of modern industry.”

China is stuck in the middle being pressure by the advanced
economies as well as the emerging ones. By investing in becoming automated as
well as efficient, advanced economies like the US, Germany and Japan are developing
their own manufacturing plans. On the other hand, the emerging countries such
as India and Brazil are finding was to just catch up.

China's manufacturing is big, and impressive, but it is considered to be not as strong, yet the country is capable of overcoming these concerns. Although
being “trapped”, their manufacturing is still capable of performing well. Currently,
the country ranks first in the world in 220 out of 500 major types of
industrial products and is also home to many world-leading infrastructure
projects. The government is currently trying to figure out the best way to
upgrade their manufacturing in the quickest way possible. The world is going
through the 4th industrial revolution, and in the coming years, a
new structure will be emerging among the leading countries.

The country has devised another 5-year plan that started in 2016 and will last till 2020 that outlines a
set of policies to help optimize the modern industrial system that will be able
to prosper in this environment. They want to focus on carrying out structural
adjustment that will help revitalize the economy. The country wants to focus on the supply-side structural reforms that will encourage new industries while
upgrading the traditional ones and to quickly implement new modern industrial
systems with strong innovative capabilities that will also provide quality
service.

The government has realized that upgrading the industrial
and manufacturing sectors is key to helping their economy flourish. They have
allocated a certain amount of money to help improve the following sectors, such
as industrial technology. They have realized, in order to move forward economically, they need to keep up with the technological advances. Without upgrading, they will fall behind.